Wheat movement in Western Canada has started to slow down, as some farmers are eager to get started on seeding and have shifted their focus to other projects.
“Right now the focus is on trying to get out in the field,” said Reid Fenton with BLB Grain Group at Three Hills, Alta. “In this area we’re at least a week away, and realistically 10 days to two weeks away.”
But seeding looks like it could be even further away in parts of Manitoba and Saskatchewan, and those regions could see a pickup in selling if farmers decide they want to move some grain before seeding, said Blair Rutter, executive director of the Western Canadian Wheat Growers Association in Winnipeg.
According to the Canadian Grain Commission, farmer deliveries of wheat totaled 275,800 tonnes during the week ended Sunday (April 21), down from 297,600 the previous week and 330,800 during the same period in 2012.
Farmers aren’t enticed to sell their crop because prices aren’t as attractive as they were earlier in the year. Some farmers have already locked in new-crop prices around $8.50 a bushel, which is higher than current cash prices for both old and new crops, said Fenton.
According to Prairie Ag Hotwire, Canada Western red spring (CWRS) wheat prices for old crop ranged from $7.25 to $8.09 per bushel as of Thursday and new crop values were $7.09 to $7.56 per bushel.
The movement of grain that has already been contracted will also be slower this year due to delayed seeding, said Fenton.
“A lot of wheat is contracted for delivery in May, but I think it will likely be a June delivery just given the perception that we’re a little bit late and guys are going to be focused on seeding instead of hauling grain,” he said.
Despite slow selling now, movement is slightly ahead of last year’s pace because farmers were aggressive sellers earlier in the year.
CGC figures show that a total of 12.95 million tonnes of wheat had been delivered by producers as of April 14 for the 2012-13 crop year, up from 12.8 million at the same time in 2012.
Strong prices earlier in the year, and the fact that farmers were able to market their own grain for the first time had a lot of producers selling aggressively right off the combine, and has encouraged them to seed more acres this spring.
Statistics Canada pegged wheat acreage for 2013-14 at 26.72 million acres, up from the 23.8 million acres planted in 2012-13, in its latest planting intentions report, released Wednesday.
But the industry generally thinks that number is a little bit too high, and some of the acres will move into other crops because of the late spring.
“I think you could take a million acres out of wheat and stick it into canola,” said Fenton. “And, I think barley acres will be higher than what they said, especially with the amount of snow they still have in some areas.”
— Terryn Shiells writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.